Smart Glasses Industry Analysis to 2024: AI Glasses is Exploding

Smart Glasses Industry Analysis

Smart glasses are innovative wearable products that combine eyewear, display, audio and interactive functions. From a broad perspective, smart glasses include XR (VR, AR, MR) and AI glasses and other products, of which VR glasses through computer technology to create a completely virtual digital world, isolated from the physical real world; AR glasses is the computer real-time generation of virtual information to the real environment, retaining the user's perception of the real world; MR glasses in the AR glasses on the basis of further improving the virtual image effect of the authenticity and virtual integration requirements, the highest technical difficulty; and AI glasses for the traditional glasses to AR/MR fusion requirements, the highest technical difficulty; and AI glasses for the traditional glasses to AR/MR interaction functions. MR glasses on the basis of AR glasses to further improve the authenticity of the virtual image effect and the fusion of reality and virtual requirements, the highest technical difficulty; and AI glasses for the traditional glasses to AR/MR glasses iteration of the transition form, which is equipped with AR/MR glasses have speakers, microphones, independent power supply and other basic components, but not equipped with a display screen.

Global smart glasses market shipment growth is under pressure, market scale growth rate is improving marginally, and is expected to resume positive growth in 24 years. According to IDC data, in 14-23 years, the global smart glasses market size increased from $135 million to $3.416 billion, corresponding to a CAGR of 49.71%, and shipments increased from 193,800 units to 6,755,300 units, corresponding to a CAGR of 55.87%; of which, 2021 is the peak of the industry scale, and the global smart glasses market size reached $5.031 billion, and shipments exceeded ten million units; after 2022, the market scale growth is under pressure, and the growth rate in recent years is expected to return to positive growth in 24 years. 5.031 billion U.S. dollars in 2021, shipments exceeded ten million units; after 2022, the market scale growth pressure, in recent years, the growth rate of marginal improvement.24H1, the global smart glasses market size of 1.531 billion U.S. dollars, year-on-year -8.61%; shipments of 1.68 million units, year-on-year -48.39%. According to IDC data, in 2024, the global smart glasses industry shipment volume will be Return to positive growth in 2024, shipments are expected to +44.2% year-on-year to 9.7 million units, mainly due to the release of new headset devices such as the Apple Vision Pro in the second half of the year; 24-28 years, the global smart glasses shipments will increase with the increase in consumer application scenarios and further growth.

Smart glasses have both the properties of traditional eyeglasses and intelligent functional properties such as recording and camera, the application space is more broad, and we are optimistic about the development of smart glasses industry. Smart glasses with built-in headset, microphone and other related hardware can provide audio broadcasting, voice calls and other functions, and through the microphone and AI voice interaction, the convenience of information acquisition and interaction is higher; part of the smart glasses comes with a camera to support the first-person perspective to realize the shooting of images or videos, providing users with a more immersive shooting experience.

Compared with traditional glasses products, from the functional point of view, smart glasses have all the vision aids of traditional glasses while increasing the functions such as recording and video recording, which makes the application scene richer; from the outside, it extends the structure form of traditional glasses, which can play a decorative role and satisfy the characteristics of the consumer demand for fashion and functionality; superimposed on the current characteristics of smart glasses, such as further pursuing the lightweight, we believe that the product power of smart glasses is relatively strong, and the product space is expected to be further opened in the future with the further refinement of product design and humanization. The product power of smart glasses is strong, and the product space is expected to be further opened with the further refinement and humanization of product design in the future.

Changes in the development of the smart glasses industry

Smart glasses have been developed for more than ten years, and the technology iteration drives the continuous upgrading of the products. 2011, Epson launched the first AR glasses BT-100, weighing 240g, LCD screen; in April 2012, Google released the conceptual design of the future glasses of Project Glass google glass, which has a display screen and a camera, and it is a prototype for smart glasses. In 2015, due to high cost, equipment defects, ecological insufficiency and other problems, Google stopped selling the first version of Google Glass, closed the Explorer project, and set up a separate team within the company to turn to the B market; 2016-2019, the industry has experienced a trough period, and head manufacturers such as Google, Microsoft and Magic Leap are still in the process of updating and iterating the software and hardware. In 2016-2019, the industry experienced a trough period, Google, Microsoft, Magic Leap and other head manufacturers are still updating and iterating AR glasses products in terms of hardware and software, while Tencent, Huawei, Amazon and other companies have launched smart glasses that focus on audio/video and do not have a display; after 2021, with the enhancement of the integration of electronic devices and chips, the derivation of smart glasses has differentiated into a wide range of forms such as movie-viewing class smart glasses, auxiliary information display smart glasses, photography and photo class smart glasses, smart audio glasses and other forms of AR smart glasses, gradually penetrating into the C-side market. After 2021, with the improvement of electronic device and chip integration, smart glasses derived and differentiated into various forms such as movie-viewing smart glasses, auxiliary information display smart glasses, photography and photo smart glasses, smart audio glasses, etc., and AR smart glasses gradually penetrated into the C-terminal market.

AI glasses are downgraded version of AR glasses, taking into account the price and basic performance, more suitable for consumer scenes, and the first to realize the volume in C. The main difference between AI glasses and AR glasses lies in the reality enhancement technology, AI glasses lack the visual interaction function of AR glasses, but have the basic functions of voice, photography, etc., and at the same time, increase the AI interaction function; in addition, due to the decline of data and arithmetic power, AI glasses are lighter in weight and more comfortable to wear, and more affordable; overall, AI glasses are more cost-effective for the mass consumers with daily application needs. In addition, due to the decline in data and arithmetic power, AI glasses are lighter in weight, more comfortable to wear, and more affordable; overall, for the daily application needs of mass consumers, AI glasses are more cost-effective and easier to penetrate in the C-end.

AR glasses are more complete, with the continuous upgrading of hardware and software, AR will be the next trend of smart glasses. AR smart glasses integrated glasses, TWS, smart watches, cameras and other hardware attributes, such as ① the attributes of the glasses, to provide myopia, presbyopia or sunglasses, as well as fashionable appearance, etc.; ② the hardware attributes of the TWS, to provide audio playback, voice calls, etc.; ③ the hardware attributes of the smartwatch, to provide health detection, sports assistant and other functions; ④ the hardware attributes of the camera, to provide image shooting, The hardware attributes of camera provide functions such as image shooting, gesture capturing, etc.; ⑤ The hardware attributes of projector provide functions such as image and video projection playback, etc.; ⑥ The hardware attributes of cell phone provide functions such as communication and socializing, entertainment and leisure, etc.; ⑦ The hardware attributes of computer provide functions such as production office, meeting and education, etc.; ⑧ The hardware attributes of e-book provide functions such as book reading and data querying.

On the whole, AR smart glasses have more complete functions than AI smart glasses, and can meet the needs of users with richer application scenarios; due to technical limitations in design, AR smart glasses can only be based on certain relatively mature technologies to explore commercial scenarios at this stage, and there is still a distance from the overall all-weather wear and sales volume to reach cell phone level of general-purpose terminals; in the future, with the continuous upgrading of AI and other technologies, lightweight AR glasses may be the next generation of products for smart glasses upgrading. In the future, with the continuous upgrading of artificial intelligence and other technologies, lightweight AR glasses may be the next generation of smart glasses upgrade.

The smart glasses industry has a vast space, brands are competing with each other, and quality offline channels have become a must for soldiers.

Ray-Ban Meta is a popular product among the C-end smart glasses, which is the second generation of smart glasses co-branded by Meta and Ray-Ban; by comparing the two generations of products, Ray-Ban Meta has upgraded its appearance, shooting, etc., and has also accessed the AI big model to further improve the user experience, which makes us believe that the continuous upgrading of the AI big model and user experience is the key element for achieving high sales at the terminal at this stage. Therefore, we believe that the continuous upgrading of AI model and user experience in both directions is the key factor for smart glasses to realize high sales at terminals at this stage.

In terms of appearance design, the 2 generations of glasses follow the shape of Ray-Ban classic sunglasses, and the styles are more abundant than the 1 generation, which can meet the needs of more people and face shapes to wear. The appearance design of both generations of products is highly similar to the classic Ray-Ban sunglasses, and the 1st generation of eyewear has launched three models, namely Wayfarer, Headliner and Skyler, which correspond to the classic Ray-Ban sunglasses with square frame, round frame and cat's-eye frame; the 2nd generation of eyewear has added a new model of Low Bridge Fit Headliner (suitable for people with short nose), which can meet the needs of more consumer groups; moreover, the 2nd generation of eyewear has added a new model of Low Bridge Fit Headliner (suitable for people with short nose). In addition, the weight of the frames of the 2nd generation glasses is lighter and the colors of the frames are more available, so the wearing experience of the users is improved.

In terms of shooting, the lens, memory, speaker and other comprehensive upgrades, shooting experience further. 2 generation glasses photo and video recording effect is close to the effect of cell phone wide-angle camera, 12MP camera + 1080P video + 60 FPS can basically meet the daily use of ordinary users, but also provides a better quality of photography than the 1 generation of glasses (5MP camera); the storage space from the 1 generation of 4GB to 32GB. The storage space has been expanded from 4GB in the 1st generation to 32GB in the 2nd generation, which enables the glasses to replace the cell phone lens in certain scenarios and record life content at any time; in addition, the speakers of the 2nd generation of glasses increase the bass by 2 times and the maximum volume by 50% to alleviate the defects of sound distortion, and at the same time, directional audio technology is added to optimize the problem of sound leakage, and a five-microphone array is equipped to support immersive audio recording; based on this configuration, the user is able to record videos and slices while accurately capturing the video and video content with the glasses. Based on this configuration, users are able to record video with the glasses while slicing and accurately capture the sound closest to the current environment, and restore the real sound of the original week, further improving the shooting experience. The 2nd generation glasses are connected to AI model, and the interaction experience is upgraded. 2 generation glasses are built-in Meta's Llama multimodal AI model, users can evoke AI through the command of "Hey Meta", and carry out voice interaction to query the weather, time, sports games, news programs and other basic information in daily life, and can be combined with the camera of the glasses itself, based on what they see in front of their eyes, and through the camera of the glasses themselves, users can use the camera to record video clips with their eyes. The camera of the glasses can be combined with the camera of the glasses itself, and based on what you see in front of your eyes, you can analyze the big model and carry out questions and answers, which can realize more practical functions such as text translation, querying real-time information through voice commands, and recognizing streets and buildings.

The Ray-Ban Meta smart glasses were released in September '23, and with the help of AI models, sales are expected to exceed one million in 24 years. In September 2023, the new generation of Ray-Ban Meta smart glasses, launched by Meta in collaboration with Essilor Luxottica, was officially released, with a built-in directional speaker, microphone, and camera. Ray-Ban Meta has a built-in directional speaker, microphone, camera, and other components, which can be used for FPV filming/video recording, making calls, listening to music, etc., and is priced at $299; according to VR Gyro, only 300,000 pairs of Ray-Ban Stories were sold from September 2021 to February 2023, with only 27,000 active users per month, which is less than 10% of the device volume. In April 2024, Ray-Ban Meta was updated with new AI features, adding Meta's newest addition. In April 2024, the Ray-Ban Meta was updated in AI, adding Meta's own Meta Llama3 model with more complex command processing and interaction capabilities.

According to IDC data, the shipment volume of Ray-Ban Meta in 23Q4/24Q1 was 36/10 million pairs respectively; according to The Verge data, the cumulative sales volume of Ray-Ban Meta is expected to be more than 1 million pairs by May 2024; compared with this, the upgrade of hardware and the implantation of AI application can effectively bring about the enhancement of the sense of use of smart glasses, which will drive the increase of the sales of C-end. In comparison, hardware upgrade and AI application implantation can effectively improve the sense of use of smart glasses, which will in turn boost C-end sales. At present, the AI function of Ray-Ban Meta smart glasses is limited to users in the United States and Canada, and the dialogue is only in English. With the further liberalization of the coverage of regions and languages in the future, the sales space of Ray-Ban Meta may further open up, and Beziers Consulting forecasts that the corresponding annual sales may exceed 6 million units, and the smart glasses industry may usher in the wave of globalization of the C-suite consumption demand.

The rapid evolution of domestic AI big models provides more possibilities for smart glasses product upgrading. Since the release of ChatGPT in 2022, the domestic AI fever has continued to rise, the domestic consensus on big models has been formed rapidly, and the competition for big models has intensified. By the end of 2023, a number of domestic enterprises have released large models and commercialized deployment, such as Tencent Mixed Yuan Assistant, ByteDance Doubao Model, Baidu Wenxin Yiyin 4.0, etc. According to wellsenn XR, as of April 2, 2024, there are 117 generative AI models that have completed the filing in our country, together with the generative AIs that have not completed the filing, there are 117 generative AI models in our country that have completed the filing in our country, according to wellsenn XR's incomplete statistics. According to wellsenn XR's incomplete statistics, there are more than 300 generative AI models in China, and the rich database of models provides more possibilities for the upgrading of smart glasses products in the field of AI.

Fierce competition in the large model industry to promote price competition, the use of the threshold is further reduced, is expected to accelerate the landing of more intelligent glasses products based on large models. At present, the competition among large model manufacturers in China is gradually white-hot, pushing the large model industry into price competition, and many model manufacturers such as Depth Seeker, Ali, Tencent, Byte, Baidu, etc. have significantly reduced the API cost or announced free use; for developers and users, the threshold of using large models has further decreased compared with the past, which is expected to accelerate the landing of more intelligent glasses products based on large models.

AR glasses may be the best carrier for AI, optimistic about the market space of "AI+AR" smart glasses. Complete AR glasses usually have components such as near-eye display module, camera, microphone, speaker, etc., which can realize input and output from voice (text) to picture and video content, basically including the main types of content for interacting with AI models; moreover, with the support of near-eye display optics, the virtual picture can overlap with the physical world, providing a more futuristic experience; compared to products such as cell phones and PCs, AR glasses can realize more efficient human-computer interaction through natural language, which is the best carrier of AI. Compared with mobile phones, PCs and other products, AR glasses can realize more efficient human-computer interaction through natural language, which is the best carrier of AI.

At present, AI glasses and AR+AI glasses are exploring and developing in parallel, AI glasses are the first to realize high growth in the consumer market due to lightweight and light functions, AR+AI glasses are still in the starting stage due to higher technical difficulties, and the head AR enterprises such as Thunderbird Innovation, Meta, and so on, have started to lay out the relevant systems or products, such as Thunderbird's RayNeo AI OS and Meta Project. Orion.

According to wellsenn XR data, it is expected that after 2030, AI+AR technology will develop to a mature stage, and AI+AR smart glasses industry will enter a period of high-speed development; by 2035, AI+AR smart glasses will eventually realize the replacement of traditional smart glasses, and the global sales of AI+AR smart glasses will reach 1.4 billion units, which is comparable to the scale of smartphones, and will become the next generation of general-purpose computing platform and terminal. It will become the next-generation universal computing platform and terminal, and is optimistic about the market space of "AI+AR" smart glasses.

investment analysis

Dr. Eyewear is the only A-share listed head eyewear channel provider, with significant competitive advantages in channels, professional services and industry chain accumulation, and is expected to become the primary retail channel chosen by smart eyewear manufacturers. Dr. Eyewear has a wide and in-depth channel layout, realizing all-round offline and online business synergy and precise marketing.

1) Offline:

The company is deeply cultivating the first and second tier core consumer markets in China, such as East China and South China, and actively expanding the sinking market through the franchise mode, constantly optimizing and upgrading the sales channel layout, and continuously improving the sales network. As of June 30, 2010, the Company had a total of 530 stores, including 501 directly-managed stores and 29 franchised stores, covering 25 provinces, autonomous regions and municipalities directly under the central government, covering professional optometry channels such as shopping malls and hospitals in core business districts of first- and second-tier cities, as well as large-scale superstores such as Sam's, Rainbow and China Resources, and duty-free groups such as SZDT Group and HITS Duty Free.

2) Online:

The Company actively embraces the Internet ecosystem, opens official accounts on mainstream social platforms such as Weibo, Jinyin and Xiaohongshu for brand dissemination and product promotion to increase online brand exposure and discussion, and opens official flagship stores on e-commerce platforms such as Tmall, Jindong, Jindoduo and Jindo, to realize the development of omni-channel sales business.

With professional dispensing service and dispensing consultants, the service is highly professional and good experience. Dr. Eyewear stores have professional and complete dispensing equipments, integrating professional optometry, glasses testing, assembly and processing, which can provide consumers with a more scientific optometry experience; the dispensing consultants of the stores have gone through the rigorous study in Dr. Eyewear's exclusive training center, with rich theoretical knowledge reserves and professional dispensing experience, which can match more suitable glasses products according to the unique needs of each consumer and bring personalized dispensing experience to the consumers. The consultants are able to match the more suitable eyewear products according to the unique needs of each consumer and bring personalized dispensing experience to consumers. We have a high consumer awareness base.

According to Ai Rui Consulting's "2023 White Paper on China's Optical Lens Industry", in the survey of consumers' awareness of optical store brands, Dr. Eyewear is ranked second, second only to Baodao, with Baosida and Da Guangming located in the third and the fourth place respectively, and comparing with consumers' awareness of eyeglasses brands, it can be found that consumers have a higher degree of cognition of eyeglasses stores, which indicates that the head of the chain of eyeglasses shops with high reputation has a higher voice in the sale of eyeglasses. This shows that the head chain optical stores with good reputation have higher voice in eyeglasses sales, and the brand image of "Dr. Optical" is of high quality, with high consumer recognition, which has strong influence on consumers' eyeglasses purchasing.

With the rich accumulation of industry chain, Dr. Eyewear is able to capture the changes in the eyewear industry and feed back to the product layout of eyewear brands in the terminal stores. Up to now, Dr. Eyewear has established long-term strategic cooperative relationships with many famous eyewear manufacturers in the world, such as Carl Zeiss, Kering, Essilor, LVMH, etc., to provide consumers with trendy and fashionable eyewear products around the world, and through co-branding and exclusive agency with major trendy brands, Dr. Eyewear designs traditional eyewear into fashionable items that are more in line with the aesthetics of the current consumption, bringing consumers more diversified and personalized choices. Through the cooperation with high-end eyewear brands, Dr. Bao has been able to provide consumers with more diversified and personalized options. Through the cooperation with high-end eyewear brands, Dr. Eyewear has been able to continuously learn advanced design concepts and technical essence, and is expected to rely on its rich industry experience to empower the smart eyewear brands to roll out their products in the terminal stores and provide effective suggestions on the direction of the subsequent iteration and upgrading of the products in the future.

Early layout of smart glasses, cooperation with Thunderbird and other head smart glasses manufacturers. Dr. Eyewear started to lay out the smart glasses track as early as 2022, focusing on the "last kilometer" of smart glasses, and has established cooperative relationships with Huawei, Thunderbird Innovation, Rokid, Singing Phantom, Li Weike and other science and technology companies, to provide lens fitting services and sales channels for smart glasses.

1) Thunderbird Innovation:

The cooperation continued to deepen, and a joint venture company was established in 2010 to jointly carry out the R&D, design, sales, marketing and service of the new generation of AI glasses, etc. In May 2022, the Company and Thunderbird Innovation reached a strategic cooperation and set up a joint laboratory to research and develop myopia solutions centering on the human body wearability ergonomics and the optical waveguide AR glasses, and explored the best fusion of the myopia lenses and the optical waveguide AR glasses. In March 2023, Dr. Eyewear indirectly invested in Thunderbird Innovation through the investment fund of Fei Yu, which invested RMB 35.16 million and held 5.76% equity in Thunderbird Innovation, and the two parties are committed to promoting the landing and market popularization of consumer-grade real AR glasses. In August 2024, the Company and Thunderbird Innovation reached a cooperation agreement to jointly invest in the establishment of a joint venture company, Dr. Eyewear holds an equity interest of 20% in the joint venture company, Dr. Eyewear will be responsible for the sales and promotion of the offline channels, participate in the product research and development design, and have the right to make joint decisions on the key strategies of the products, channels and marketing. According to the company's announcement, Thunderbird Innovation public number, the joint venture company will plan to develop shooting glasses, audio + AI glasses first generation products, the first AI glasses is expected to be launched at the end of the year.

2) Huawei:

In 2019, Dr. Eyewear will establish a cooperative relationship with Huawei and become the exclusive partner of its smart glasses products in the offline optical retail channels, and will provide Huawei's smart glasses sales and fitting services in some of the Company's offline stores; and in 2021, in conjunction with the debut of Huawei's third-generation smart glasses, Dr. Eyewear will provide consumers with professional on-line dispensing services in Huawei's shopping mall.

3) Star Chronicles Phantom:

On November 30, 2023, Stargazer Meizu Group officially released the AR smart glasses brand MYVU, launched MYVU and MYVU Exploration Edition, two new all-weather fashion AR smart glasses, and announced that it will cooperate with Dr. Eyewear to start dispensing service; Dr. Eyewear will provide smart glasses dispensing users with customized solutions of high refractive optics such as 1.60, 1.67, and so on, and realize AR function and vision correction function under the same lens. Dr. Eyewear will provide users of smart glasses with customized 1.60, 1.67 and other high-refractive optical lenses, realizing AR function and optic correction under one lens.

4) Rokid:

In 2021, Dr. Eyewear became the sole partner of Hangzhou Lingmate Technology Co., Ltd. in eyeglasses retail channel, providing product display, sales and after-sales service support for its AR glasses "ROKID AIR" in some of Dr. Eyewear's offline stores and the official micro-commerce platform; in December 2021, Rokid air debuted in Dr. Eyewear's offline stores in Hangzhou and Shenzhen. In December 2021, Rokid air was first launched in Hangzhou and Shenzhen offline stores of Doctor Eyewear; in April 2023, Doctor Eyewear and Rokid reached a deep cooperation, and will provide Rokid Max users with online dispensing services, including farsightedness lenses, myopia lenses, astigmatism lenses and other customized solutions.

5) Li Wei Ke:

In July 2024, Li Wei Ke Technology and Dr. Eyewear reached a strategic cooperation to officially introduce Meta Lens Chat, an AI smart glasses, into Dr. Eyewear's 50 offline stores nationwide, with Dr. Eyewear as the premiere offline channel.

(This article is for information purposes only and does not represent any investment advice on our part. To use the information, please refer to the original report.)